Key ESFA functions, including non-financial regulation of academies in preparation for a bigger academy sector, to be moved in-house to the Department for Education, documents reveal

Key aspects of work currently performed by England’s Education and Skills Funding Agency are to be moved to be under the more direct control of the Department for Education amid major reforms of the way the department operates, Education Uncovered can reveal.

The regulation of academies, other than financial regulation, will be taken in-house at the DfE under a beefed-up regional operation, with the department planning for growth in the number of non-local authority maintained schools following publication of a white paper on the schools system next month.

And skills policy in the post-16 field, much of which is now carried out by the Education and Skills Funding Agency (ESFA) will also be moved to be part of the core DfE, as this field gets a higher profile under post-Brexit government plans to boost its job-related skills policies.

The moves come following a six-month DfE review of the work of the ESFA, carried out by the former Ofsted chief inspector and DfE permanent secretary Sir David Bell. It is expected to be published next week, but the main findings, and the government’s response, have been seen by this website. The review made 46 recommendations, 44 of which are being accepted in full by the DfE.

As has been reported already, the changes will see a rejigging of England’s Regional Schools Commissioner areas, with London getting its first region for the first time since the commissioners were introduced, at speed, back in 2014.

Perhaps significantly, too, for those Education Uncovered readers who have worked their way  through the academies complaints system, these are also to be moved in-house to the DfE, rather than being handled for some aspects via the ESFA.

As mentioned, almost all of the Bell review findings have been accepted by the DfE, as part of its own organisational reform project, called “Future DfE”. However, the moves are proving controversial among staff, with uncertainty about how the changes will affect the workforce, despite assurances from DfE leadership that there will be no redundancies.

The detail

The DfE’s review of the ESFA, led by Sir David Bell who is currently vice chancellor of the University of Sunderland having consulted with a 12-person external panel which included the chief executive of ARK Schools, Lucy Heller, was part of a wider cross-government review of what are called Arms Length Bodies.

Arms length bodies are public bodies, connected to government departments, but which have some separation in terms of structure.

The ESFA is connected to the DfE, including having its chief executive serving as part of the DfE’s leadership team.

However, the ESFA chief executive also reports directly to Parliament, on the management of its funds, as the agency’s accounting officer. The ESFA has its own management board, audit and risk committee and non-executive directors. Sir David Bell’s report says the ESFA also has “its own relationship” with the National Audit Office and Commons Public Accounts Committee, which scrutinise public funding.

Despite this, found the Bell review, there was a risk of a “lack of clarity in roles, responsibilities and accountabilities across ESFA and DfE, particularly where there are shared interests”.

It appears that the ESFA’s status as an arms-length body will not change under the reforms, but that major aspects of what the ESFA does will transfer to be in-house at the DfE, leaving the ESFA  “refocused” to concentrate on its core role funding – and monitoring the spending of – education bodies including academies and the further education sector.

It appears that this is happening in part because the DfE expects more maintained schools to become academies following publication – reportedly expected next month – of its much-anticipated schools white paper.

Post-16

In the field of post-16 education, where the ESFA has had significant policy roles in recent years, these functions will move to be in-house at the DfE.

Responsibility for post-16 “policy and programmes” is currently split across DfE and ESFA, the Bell review found. ESFA has responsibility for apprenticeships, T Level and Level 4/5 policy development and programme delivery, plus the National Careers Service (NCS) and Worldskills, while DfE “has responsibility for other post-16 policy areas”.

The Bell report concluded: “The split of policy responsibilities across DfE and ESFA makes it more difficult to implement the government’s skills reform agenda…system leaders told us that roles and responsibilities needed to be clarified, with the department taking a more strategic approach across policies and products. Furthermore, college leaders have told us that dealing with the department can be confusing, sometimes having multiple disconnected and confusing conversations.”

So all policy work for post-16 education is now to take place within the DfE itself. The Bell report stated: “To support the government’s skills agenda…DfE has decided to create a new internal ‘Further Education Higher Education and Employers’ (FEHEE) Group which will bring together all post-16 policy and operational policy in a single strategic centre….the aim is to enable the department to be an excellent local and regional partner and place-shaper.”

Nevertheless, even after this recommendation is implemented, Bell indicated that there were likely to be challenges in this field for the DfE.

The report stated: “Looking beyond ESFA itself, system leaders told us that there has, to date, been a lack of distinct and strategic focus across the post-16 landscape, and the regulatory system is complex and difficult to navigate. This is largely attributable to having multiple bodies to engage with. As a result, colleges and other providers often feel a cumulative and incoherent burden. Some complexity is inevitable , as FE colleges operate alongside so many different aspects of education and training.” The Bell review’s recommendations, alongside the wider “Future DfE” project, would enable the department “to be more strategic and coherent in its approach”.

But the report added: “Nonetheless, we recognise that more could be done across the regulatory bodies to minimise the collective regulatory burden on colleges. We suggest that the department should review the level of bureaucratic burden placed on providers across regulators.”

Changing regulatory structure for academies, and beefed-up regional DfE structure

The Bell report also pointed out that both the ESFA and the DfE itself – the latter via its Regional Schools Commissioner structure – have regulatory responsibilities within the schools sector. It said the arrangements for this should change.

Bell stated: “We…found that the department lacked a unified directing voice to the school system at a regional level. The Regional Schools Commissioners (RSCs) and ESFA work together to provide oversight of the school system; the RSC’s focus on educational performance, ESFA on financial management, with both contributing to governance. This sometimes creates points of friction internally and a lack of clarity externally, which staff work hard to manage.”

This is to be addressed in part through a new “pre-16 regional tier and Schools Group”  at the DfE – seemingly a beefing-up of the department’s regional work, given that it now directly oversees nearly 10,000 schools as academies and with suggestions here that officials expect the sluggish recent growth in academy numbers to take off following publication of the white paper.

The DfE’s new regional structure is expected to be in place before the summer Parliamentary recess, and fully up-and-running by September.

Accordingly, the Bell review proposes moving non-financial regulatory functions within the ESFA to the DfE itself. The ESFA’s “functions related to school/trust governance [would] move to DfE’s pre-16 regional tier,” as would “new trust and free school activity, UTC [University Technical College] engagement, and networking events”.

As with virtually all of the recommendations in the Bell review, these will be implemented by the DfE, as will a recommendation from Bell that these new regional arrangements be subject to “review” 12 months after their implementation.

The Bell review also recommended that the DfE “considers bringing the complaints functions for maintained schools and academies together in a fully centralised complaints system within the department”. This, too, was agreed; it would appear to mean the ESFA will no longer get involved in handling complaints about academies, perhaps except in relation to funding, though for many readers of this website the criticism about the academies complaints system as a whole has been at a more fundamental level: that it leaves investigations of the detail of the complaint to the trust itself, so lacks teeth.

The ESFA is also to lose control of the Academies Trust Handbook – formerly the Academies Financial Handbook – the “ownership” of which is also to move in-house to the DfE, with the argument having been made that this has become less focused on the purely financial side of academy operations over the years.

As with respect to the post-16 sector, the Bell review appeared to conclude that there is a possible problem with overlapping public bodies interacting with the pre-16 schools sector. It stated: “We recommend that further work is done as part of school system reform to create a more strategic and shared understanding of responsibilities between DfE, ESFA, and Ofsted, and that the outcomes of this work are communicated widely.” This recommendation was also agreed by the DfE.

Safeguarding

The Bell report also raised concerns about how “safeguarding issues” are approached in the oversight of the academies sector.

It stated that “several concerns that stakeholders raised with us which, while they fall outside our remit, provide important context for our recommendations. Several stakeholders told us that the respective roles of different bodies for dealing with safeguarding issues in academies were confusing, and hence required attention. The school system reform process is an opportunity for the department to define the arrangements for safeguarding, and to update the Secretary of State’s powers in this area.”

Points had also been made to it on the regulation of academy trusts. The Bell report stated: “We also heard a desire to move towards a single regulator and a move towards a comprehensive and appropriate regime for trusts. Our recommendations, along with the Future DfE project, will bring together a wider and more coherent set of regulatory functions into one place (albeit alongside non-regulatory functions), while retaining ESFA’s funding delivery role. This should go some way to alleviating the issues raised by stakeholders in the short to medium term.”

In its own briefing document on its reaction to the Bell review, the DfE stated: “The clear and comprehensive recommendations made in the review will help us to organise the department in a way that directly benefits children and learners. We will implement the majority of the recommendations.”

Other DfE changes

Education Uncovered has gained an insight into some other changes, more widely across the DfE, to come into effect as part of the “Future DfE” work.

As has been trailed in Schools Week, including in a report published today, the current eight Regional Schools Commissioner areas are to be rejigged into nine regions, with London as a whole getting its own one for the first time.

It looks as if these regions will now map onto those which apply for the rest of the DfE’s operations – DfE exam result statistics, for example, group each area of England into these nine regions – and for most areas of the country they will also match Ofsted regions. (When the commissioner structure was set up, hastily, back in 2014, the DfE under Michael Gove had been keen to distinguish its regions from those operated by Ofsted; this would appear to bring this anomaly to an end).

This rejig forced a hold-up to elections for membership of the Headteacher Boards, which advise each of the RSCs.

The government’s much-touted “levelling-up” agenda, for boosting areas of the country other than England’s South, also seems to be being reflected in a new behind-the-scenes structure at the DfE.  

A new “strategy group” within the department will oversee the functions of “levelling up”, “disadvantage” and “recovery”. Beneath this will be divisions of officials working within “families,” “schools” and “skills”.

The schools directorate also includes a department working under a “director of pupil wellbeing and safety”, including a “deputy director of mental health delivery”; while there is a “director of schools system policy”; a “director of school strategy and system reform” – under which deputy directors of “governance and trust development”, “Education Bill Team” and “intervention, faith and accountability”  sit – and a “director of teaching workforce and National Tutoring Programme”.

Workforce effects – and Covid thoughts

All this re-organisation is creating a degree of anxiety among the DfE’s civil servant workforce, as both the Bell report and the DfE reactions seem to acknowledge. The DfE response stated: “We recognise that it is vitally important to treat ESFA staff well, and will support them through the recommended changes.”

However, it was put to me that “staff are unhappy”, with a degree of “unrest”, because, while DfE leadership had said there would be no redundancies, changes would be made to teams and there was no certainty about the detail as to how this will work, especially in cases where work was carried out both by the DfE and the ESFA. It was felt, too, that there had not been enough “solid information” about what was going to happen.

I have seen little mention in either the Bell recommendations themselves, or in the DfE’s reaction and reforms, of the direct impact of Covid and, specifically, how the department’s handling of that has been perceived within the education sector. So it is unclear how the DfE might use these reforms to address criticism that the response has not been good, as covered, for example, in the coruscating Institute for Government report on the DfE’s covid response for schools last year.

As ever, Education Uncovered will continue to cover the detail of how DFE policymaking impacts on people’s experiences of the schools system, with these organisational details sometimes making a difference to how individual attempts towards accountability, when concerns are raised, are encountered. These developments, then, may provide interesting background for future investigations.

Snap analysis

There will clearly be a lot to analyse, both within these proposals themselves and in the forthcoming schools white paper. So at this early stage I offer just one very tentative thought, on the idea that the regional aspect of the DfE’s schools and further education work is about to be strengthened.

It is this: is this a movement back towards the fabled “middle-tier” that Michael Gove was initially wary of, in the creation of academies, but eventually had to partially introduce, through Regional Schools Commissioners?

The argument, as the number of academies swelled from barely 200 in 2010 to thousands within the first couple of years of the coalition, was that some regional structure was needed, with these schools now overseen directly by Whitehall and with local authorities, seemingly largely despised by the central government architects of reform, no longer in the picture for these schools.

So, with even more schools said to be set to academise following the white paper – but with mystery still surrounding what the mechanism for this will be – a beefed-up regional focus, both within the ESFA and the wider DfE, will be needed.

However, there will continue to be question marks over whether it makes sense to oversee so much of the schools system from Whitehall, however the functions of this DfE operation are rejigged. Few other countries operate in this way.

As one unnamed academy leader told that Institute for Government investigation last year: “Whether you are in the local authority or the academy world, you would not start from here in designing an education system.”